Budget Blog

June 3, 2021 - Health Care Issues Update

By Stacey Mazer posted 06-03-2021 01:05 PM


President Releases Fiscal Year 2022 Budget

On May 28, the President released his budget recommendations for fiscal year 2022 that incorporate components from the recently released American Jobs Plan and the American Families Plan proposals. The budget totals $6 trillion in projected fiscal 2022 spending with the total for new appropriations requested of $1.52 trillion, divided between discretionary nondefense ($770 billion) and defense ($753 billion). Mandatory spending programs, including Social Security, Medicare, and Medicaid, total $4 trillion while interest payments on the debt are $305 billion. The budget projects the gross domestic product (GDP) to grow by 3.2 percent in the fourth quarter of next year and then fluctuate between 1.8 percent and 2 percent each year through 2031. The Department of Health and Human Services Budget in Brief provides details on health spending proposals. Medicaid spending for fiscal 2022 is estimated at $571 billion, an increase of $49.6 billion (see pages 85 to 88 for Medicaid details). The budget includes the $400 billion proposed increase in Medicaid home and community-based services included in the President’s American Jobs Plan with the fiscal year 2022 amount for this proposal totaling $53 billion. The budget calls on Congress to take action on a public option health insurance plan, to lower prescription drug costs, and lower Medicare eligibility but does not incorporate those proposals in the budget document. The Jim Martin table from Federal Funds Information for States (FFIS), summarizing proposed funding for major grant programs, can be found here.


CMS Announces 2022 Payment Amounts for Medicare Part D Clawback Payments

The Centers for Medicare & Medicaid Services (CMS) announced the parameters that will guide calendar year 2022 individual and state costs for the Medicare Part D drug benefit. After accounting for prior-year revisions, CMS projects an annual increase in per capita Part D expenditures of 7.31 percent. States may see even higher clawback costs in calendar year 2022 due to the potential termination of the temporary 6.2 percentage-point increase in the Federal Medical Assistance Percentage (FMAP) implemented in response to the public health emergency (PHE). Assuming the temporary FMAP increase does not continue into calendar year 2022, the Federal Funds Information for States (FFIS) estimates that calendar year 2022 clawbacks will cost states $14.8 billion, a 25 percent or $3 billion increase from calendar year 2021.


Potential Impact of Additional Funds for Home and Community-Based Services

The American Rescue Plan Act includes a provision to increase the federal matching rate (FMAP) for spending on Medicaid home and community-based services by 10 percentage points from April 1, 2021 through March 31, 2022 provided states maintain state spending levels as of April 1, 2021. This brief discusses the new provision and provides state-by-state estimates of the potential effects of the policy change.


CMS Issues Bulletin on Adolescent Access to Vaccines

The Centers for Medicare and Medicaid Services (CMS) released an informational bulletin providing an update on the status of COVID-19 vaccine availability for adolescents aged 12-15 years. The bulletin notes that during the period when the initial supply of COVID-19 vaccines is federally purchased, distribution of vaccines for those under age 19 will be through the Centers for Disease Control COVID-19 Vaccination Program, just as it is for adults. Attached to the bulletin is a new fact sheet entitled Medicaid, CHIP and BHP COVID-19 Vaccine Administration Coverage, Cost-Sharing, and Reimbursement that summarizes current policies for COVID-19 vaccine administration.


CDC Releases Guidance on $2 Billion in American Rescue Plan Funding for Public Health Workforce

The Centers for Disease Control and Prevention (CDC) provided details on the COVID-19 Crisis Response Workforce Development Program, including allowable costs and activities, terms and conditions, and the period of performance. Funds will be made available during the two-year budget period and period of performance to conduct activities necessary to expand, train, and sustain a response-ready public health workforce at the state, tribal, local, and territorial levels.